Publishers often take a while to decide whether to publish a novel, but 36 years is pushing it. This is what happened to the Portuguese writer José Saramago, whose book Skylight was submitted in 1953 and returned in 1989, a few years before he won the Nobel Prize for Literature. The author, whose work has been translated into 26 languages and whose sales exceed 2m copies, refused to let the novel be published in his lifetime. It would be a constant reminder, he thought, not so much of rejection, but of indifference and bad manners.

Posthumously things are different and this early work, which prefigures so many of the writer's later themes, has been made available in a fluid and imaginative translation by Margaret Jull Costa. It's an early example of what we might now call "apartment block" fiction, in which all the characters inhabit the same building, a genre that begins with Emile Zola's Pot-Bouille, and has since been continued by Georges Perec in Life: a User's Manual and, most recently, in Chris Ware's graphic novel of 2012, Building Stories.

This bird's-eye, or "skylight", view looks down on a block of flats in Lisbon in the late 1940s inhabited by poor couples, manual labourers and middle-class families who have fallen on hard times. There's a family of four women: a widow with her sister and two spinster daughters who are both driven mad by repressed sexual desire; Dona Justina and Caetano Cunha, an unhappily married couple who lost their daughter to meningitis two years previously; Emilio Fonseca, the bitter sales rep and his Spanish wife with a "permanent desire for contradiction"; Dona Lidia, the kept woman visited three times a week by a lover who is already on the look-out for a younger replacement; and Silvestre, the cobbler, who takes in a lodger to make ends meet.

It is this lodger, the 28-year-old Abel Nogueira, whose arrival and departure bookends the narrative. A drifter yet to undergo national service, Abel has taken a series of part-time jobs because he doesn't want to be tied down: "Life is an octopus with many tentacles. It takes just one to trap a man. Whenever I start to feel trapped I cut off the tentacle." (He is surely the author manqué: Saramago submitted the novel at 29.)

The reader never leaves the building. As the characters depart and return, days end and insomniac nights begin, we are taken into the inhabitants' money worries, fears of loneliness and abandonment, and expectations of confrontation. Simple greetings and moments of small-talk contain undercurrents of apprehension. What tricks will fate play, even on seemingly insignificant lives? How will these characters survive, and what will become of them?

It is a masterly creation: pessimistic without being bleak, lyrical without being sentimental. So why was it not published? It could be that the book requires early perseverance; the reader is introduced to some 15 characters in the first 10 pages and the book takes time to find its focus. The theme of ordinary working people struggling to make ends meet in a world where employment is precarious and the government authoritarian would not have gained much favour under the repressive regime of President António de Oliveira Salazar. There is little appreciation of Catholic family values. The novel goes out of its way to undermine any notion of contented domesticity with its plethora of unhappy marriages, infidelity and domestic abuse; and that's before Saramago turns his attention to lesbian incest and marital rape. It's perhaps no surprise that the publishers sat on this for so long.

But they missed something wonderful. Brilliantly structured, the novel contains moments of extraordinary poignancy. A mother dreams of her dead daughter, feeling "the obsessive presence of someone behind a door that all the strength in the world could not open". A man sits on his young son's bed, thinking the child is asleep, never realising the boy is awake and can hear every word; Dona Lidia sheds two tears when she realises she is going to have to start all over again. "Just two tears. That's all life is worth."

Abel Nogueira contemplates "the egotistical flow of life: greed, fear, longing, hope, hunger, vice", reads Dostoevsky and, "on those grim days when he felt surrounded by the vacuum of absurdity", he quotes Fernando Pessoa, the poet whose heteronym Saramago will come to use 30 years later in The Year of the Death of Ricardo Reis:

"'Do they want me married, futile and taxable?' Fernando Pessoa had asked. 'Is that what life wants of everyone?'"

The existential questions Abel poses are taken further in the novels Saramago later wrote when he contemplated what would happen if a plague of blindness was visited on a country (Blindness), or if people refused to vote (Seeing), or if people simply stopped dying (Death at Intervals).

One is tempted to wonder what kind of writer Saramago would have become had the novel been accepted and published in 1953. Might he have been more conservative and consciously "populist"? Did he need 20 wilderness years to think about what it must mean to be a truly radical writer, experimenting with form and style before discovering a unique voice that ultimately dispensed with most punctuation, and even the use of capital letters?

We now have both the younger and the older Saramago; two different novelists connected by a mutual imagination that lifts the reader away from "the morphine of monotony". "I have a sense that life, real life, is hidden behind a curtain, roaring with laughter at our efforts to get to know it." Abel Noguiera explains. "And I want to know life."

Saramago tears back that curtain to reveal not only the stage on which life is performed but also backstage, under unflattering working lights; to show humanity at its most anxious, its most vulnerable and most true.